☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Michigan | 38-2367843 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) |
Title of each Class | Trading Symbol(s) | Name of each exchange on which registered | ||
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller Reporting Company | ☐ | |||
Emerging growth company | ☐ |
Page No. | ||||||
Item 1. | 2 | |||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
6 | ||||||
7 | ||||||
Item 2. | 19 | |||||
Item | 27 | |||||
Item | 27 | |||||
Item 1. | 28 | |||||
Item | ||||||
Item | 28 | |||||
29 | ||||||
February 29, 2020 | 2019 | |||||||
Unaudited | Un uditeda | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 50,774 | $ | 41,688 | ||||
Marketable securities | 277,149 | 225,836 | ||||||
Accounts receivable, less allowance of $1,400 and $1,700 at February 29, 2020 and May 31, 2019, respectively | 80,692 | 82,582 | ||||||
Inventories | 89,244 | 85,992 | ||||||
Prepaid expenses and other current assets | 17,016 | 13,431 | ||||||
Total Current Assets | 514,875 | 449,529 | ||||||
Net Property and Equipment | 78,394 | 74,847 | ||||||
Other Assets | ||||||||
Goodwill | 109,761 | 103,619 | ||||||
Other non-amortizable intangible assets | 15,425 | 15,649 | ||||||
Amortizable intangible and other assets, net of accumulated amortization of $43,397 and $40,835 at February 29,2020and May 31, 2019, respectively | 55,046 | 52,096 | ||||||
Total Assets | $ | 773,501 | $ | 695,740 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 18,994 | $ | 19,063 | ||||
Accrued compensation | 5,596 | 7,085 | ||||||
Income taxes | 1,479 | 601 | ||||||
Other accruals | 13,066 | 11,502 | ||||||
Total Current Liabilities | 39,135 | 38,251 | ||||||
Deferred Income Taxes | 16,343 | 15,618 | ||||||
Other Non-Current Liabilities | 6,152 | 3,972 | ||||||
Total Liabilities | 61,630 | 57,841 | ||||||
Commitments and Contingencies (note 8) | ||||||||
Equity | ||||||||
Preferred stock, $1.00 par value, 100,000 shares authorized, 0ne issued and outstanding | — | — | ||||||
Common stock, $0.16 par value, 120,000,000 shares authorized, 52,910,832 and 52,216,589 shares issued and outstanding at February 29, 2020 and May 31, 2019, respectively | 8,466 | 8,355 | ||||||
Additional paid-in capital | 254,537 | 221,937 | ||||||
Accumulated other comprehensive loss | (13,507 | ) | (11,640 | ) | ||||
Retained earnings | 462,375 | 419,247 | ||||||
Total Stockholders’ Equity | 711,871 | 637,899 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 773,501 | $ | 695,740 | ||||
November 30, | May 31, | |||||||
2019 | 2019 | |||||||
Unaudited | Audited | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 66,414 | $ | 41,688 | ||||
Marketable securities | 247,191 | 225,836 | ||||||
Accounts receivable, less allowance of $ 1,700 and $1,700 at November 30, 2019 and May 31, 2019, respectively | 85,377 | 82,582 | ||||||
Inventories | 86,406 | 85,992 | ||||||
Prepaid expenses and other current assets | 14,795 | 13,431 | ||||||
Total Current Assets | 500,183 | 449,529 | ||||||
Net Property and Equipment | 77,150 | 74,847 | ||||||
Other Assets | ||||||||
Goodwill | 103,610 | 103,619 | ||||||
Other non-amortizable intangible assets | 15,495 | 15,649 | ||||||
Amortizable intangible and other assets, net of accumulated amortization of $ 41,923 and $40,835 at November 30, 2019 and May 31, 2019, respectively | 54,153 | 52,096 | ||||||
Total Assets | $ | 750,591 | $ | 695,740 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 19,567 | $ | 19,063 | ||||
Accrued compensation | 5,689 | 7,085 | ||||||
Income taxes | 756 | 601 | ||||||
Other accruals | 12,779 | 11,502 | ||||||
Total Current Liabilities | 38,791 | 38,251 | ||||||
Deferred Income Taxes | 15,591 | 15,618 | ||||||
Other Non-Current Liabilities | 5,292 | 3,972 | ||||||
Total Liabilities | 59,674 | 57,841 | ||||||
Commitments and Contingencies (note 8) | ||||||||
Equity | ||||||||
Preferred stock, $ 1.00 par value,100,000 shares authorized,NaN issued and outstanding | — | — | ||||||
Common stock, $ 0.16 par value,120,000,000 shares authorized,52,710,633 and52,216,589 shares issued and outstanding at November 30, 2019 and May 31, 2019, respectively | 8,434 | 8,355 | ||||||
Additional paid-in capital | 244,226 | 221,937 | ||||||
Accumulated other comprehensive loss | (11,918 | ) | (11,640 | ) | ||||
Retained earnings | 450,175 | 419,247 | ||||||
Total Stockholders’ Equity | 690,917 | 637,899 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 750,591 | $ | 695,740 | ||||
Three Months Ended | Six Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
November 30, | November 30, | February 29/28, | February 29/28, | |||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||
Product revenues | $ | 87,387 | $ | 89,562 | $ | 169,335 | $ | 172,522 | $ | 77,736 | $ | 77,375 | $ | 247,071 | $ | 249,897 | ||||||||||||||||
Service revenues | 20,416 | 17,536 | 39,892 | 34,202 | 22,133 | 20,325 | 62,025 | 54,527 | ||||||||||||||||||||||||
Total Revenues | 107,803 | 107,098 | 209,227 | 206,724 | 99,869 | 97,700 | 309,096 | 304,424 | ||||||||||||||||||||||||
Cost of Revenues | ||||||||||||||||||||||||||||||||
Cost of product revenues | 45,559 | 47,305 | 87,590 | 90,255 | 41,068 | 41,902 | 128,658 | 132,157 | ||||||||||||||||||||||||
Cost of service revenues | 11,218 | 9,760 | 22,417 | 19,707 | 13,471 | 11,170 | 35,888 | 30,877 | ||||||||||||||||||||||||
Total Cost of Revenues | 56,777 | 57,065 | 110,007 | 109,962 | 54,539 | 53,072 | 164,546 | 163,034 | ||||||||||||||||||||||||
Gross Margin | 51,026 | 50,033 | 99,220 | 96,762 | 45,330 | 44,628 | 144,550 | 141,390 | ||||||||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||||||
Sales and marketing | 17,988 | 18,499 | 35,531 | 35,732 | 17,675 | 16,722 | 53,206 | 52,454 | ||||||||||||||||||||||||
General and administrative | 10,985 | 10,121 | 21,684 | 20,319 | 10,789 | 10,018 | 32,473 | 30,337 | ||||||||||||||||||||||||
Research and development | 3,781 | 3,167 | 7,469 | 5,986 | 3,823 | 3,249 | 11,292 | 9,235 | ||||||||||||||||||||||||
Total Operating Expenses | 32,754 | 31,787 | 64,684 | 62,037 | 32,287 | 29,989 | 96,971 | 92,026 | ||||||||||||||||||||||||
Operating Income | 18,272 | 18,246 | 34,536 | 34,725 | 13,043 | 14,639 | 47,579 | 49,364 | ||||||||||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||||||
Interest income | 1,271 | 1,028 | 2,781 | 1,955 | 1,600 | 1,335 | 4,381 | 3,290 | ||||||||||||||||||||||||
Other income (expense) | (317 | ) | 427 | (439 | ) | 158 | (393 | ) | 649 | (832 | ) | 807 | ||||||||||||||||||||
Total Other Income | 954 | 1,455 | 2,342 | 2,113 | 1,207 | 1,984 | 3,549 | 4,097 | ||||||||||||||||||||||||
Income Before Taxes | 19,226 | 19,701 | 36,878 | 36,838 | 14,250 | 16,623 | 51,128 | 53,461 | ||||||||||||||||||||||||
Provision for Income Taxes | 2,950 | 3,650 | 5,950 | 5,550 | 2,050 | 3,550 | 8,000 | 9,100 | ||||||||||||||||||||||||
Net Income | $ | 16,276 | $ | 16,051 | $ | 30,928 | $ | 31,288 | $ | 12,200 | $ | 13,073 | $ | 43,128 | $ | 44,361 | ||||||||||||||||
Net Income Per Share | ||||||||||||||||||||||||||||||||
Basic | $ | 0.31 | $ | 0.31 | $ | 0.59 | $ | 0.60 | $ | 0.23 | $ | 0.25 | $ | 0.82 | $ | 0.86 | ||||||||||||||||
Diluted | $ | 0.31 | $ | 0.31 | $ | 0.59 | $ | 0.60 | $ | 0.23 | $ | 0.25 | $ | 0.82 | $ | 0.85 | ||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
November 30, | November 30, | February 29/28, | February 29/28, | |||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Net income | $ | 16,276 | $ | 16,051 | $ | 30,928 | $ | 31,288 | $ | 12,200 | $ | 13,073 | $ | 43,128 | $ | 44,361 | ||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||||||
currency translation adjustments | 2,367 | 290 | (691 | ) | (2,488 | ) | (1,761 | ) | 3,105 | (2,452 | ) | 617 | ||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||||||
unrealized gain (loss) on marketable securities | (149 | ) | — | 413 | — | |||||||||||||||||||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||||||||||||||||||
unrealized gain on marketable securities | 172 | — | 585 | — | ||||||||||||||||||||||||||||
Total comprehensive income | $ | 18,494 | $ | 16,341 | $ | 30,650 | $ | 28,800 | $ | 10,611 | $ | 16,178 | $ | 41,261 | $ | 44,978 | ||||||||||||||||
Accumulated | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||
Additional | Other | Additional | Other | |||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Paid-in | Comprehensive | Retained | Common Stock | Paid-in | Comprehensive | Retained | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Capital | Income (Loss) | Earnings | Total | Shares | Amount | Capital | Income (Loss) | Earnings | Total | |||||||||||||||||||||||||||||||||||||
Balance at May 31, 2019 | 52,217 | $ | 8,355 | $ | 221,937 | $ | (11,640 | ) | $ | 419,247 | $ | 637,899 | 52,217 | $ | 8,355 | $ | 221,937 | $ | (11,640 | ) | $ | 419,247 | $ | 637,899 | ||||||||||||||||||||||||
Issuance of shares under share-based compensation plan | 196 | 30 | 9,683 | 9,713 | 196 | 30 | 9,683 | — | — | 9,713 | ||||||||||||||||||||||||||||||||||||||
Issuance of shares under employee stock purchase plan | 10 | 2 | 536 | 538 | 10 | 2 | 536 | — | — | 538 | ||||||||||||||||||||||||||||||||||||||
Net income for the three months ended August 31, 2019 | 14,652 | 14,652 | — | — | — | — | 14,652 | 14,652 | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss for the three months ended August 31, 2019 | (2,496 | ) | (2,496 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss for the three months ended August 31 , 2019 | — | — | — | (2,496 | ) | — | (2,496 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance at August 31, 2019 | 52,423 | $ | 8,387 | $ | 232,156 | $ | (14,136 | ) | $ | 433,899 | $ | 660,306 | 52,423 | $ | 8,387 | $ | 232,156 | $ | (14,136 | ) | $ | 433,899 | $ | 660,306 | ||||||||||||||||||||||||
Issuance of shares under share-based compensation plan | 288 | 47 | 12,070 | 12,117 | 288 | 47 | 12,070 | — | — | 12,117 | ||||||||||||||||||||||||||||||||||||||
Net income for the three months ended November 30, 2019 | 16,276 | 16,276 | — | — | — | — | 16,276 | 16,276 | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive income for the three months ended November 30, 2019 | 2,218 | 2,218 | — | — | — | 2,218 | — | 2,218 | ||||||||||||||||||||||||||||||||||||||||
Balance at November 30, 2019 | 52,711 | $ | 8,434 | $ | 244,226 | $ | (11,918 | ) | $ | 450,175 | $ | 690,917 | 52,711 | $ | 8,434 | $ | 244,226 | $ | (11,918 | ) | $ | 450,175 | $ | 690,917 | ||||||||||||||||||||||||
Balance at May 31, 2018 | 51,736 | $ | 8,278 | $ | 202,572 | $ | (9,746 | ) | $ | 359,071 | $ | 560,175 | ||||||||||||||||||||||||||||||||||||
Issuance of shares under share-based compensation plan | 251 | 40 | 8,433 | 8,473 | 188 | 31 | 9,705 | — | — | 9,736 | ||||||||||||||||||||||||||||||||||||||
Issuance of shares under employee stock purchase plan | 8 | 2 | 517 | 519 | 12 | 1 | 606 | — | — | 607 | ||||||||||||||||||||||||||||||||||||||
Net income for the three months ended August 31, 2018 | 15,237 | 15,237 | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss for the three months ended August 31, 2018 | (2,778 | ) | (2,778 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Net income for the three months ended February 29, 2020 | — | — | — | — | 12,200 | 12,200 | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss for the three months ended February 29 , 2020 | — | — | — | (1,589 | ) | — | (1,589 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance at August 31, 2018 | 51,995 | $ | 8,320 | $ | 211,522 | $ | (12,524 | ) | $ | 374,308 | $ | 581,626 | ||||||||||||||||||||||||||||||||||||
Issuance of shares under share-based compensation plan | 87 | 14 | 4,093 | 4,107 | ||||||||||||||||||||||||||||||||||||||||||||
Net income for the three months ended November 30, 2018 | 16,051 | 16,051 | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income for the three months ended November 30, 2018 | 290 | 290 | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at February 29, 2020 | 52,911 | $ | 8,466 | $ | 254,537 | $ | (13,507 | ) | $ | 462,375 | $ | 711,871 | ||||||||||||||||||||||||||||||||||||
Balance at November 30, 2018 | 52,082 | $ | 8,334 | $ | 215,615 | $ | (12,234 | ) | $ | 390,359 | $ | 602,074 | ||||||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||
Additional | Other | |||||||||||||||||||||||
Common Stock | Paid-in | Comprehensive | Retained | |||||||||||||||||||||
Shares | Amount | Capital | Income (Loss) | Earnings | Total | |||||||||||||||||||
Balance at May 31, 2018 | 51,736 | $ | 8,278 | $ | 202,572 | $ | (9,746 | ) | $ | 359,071 | $ | 560,175 | ||||||||||||
Issuance of shares under share-based compensation plan | 251 | 40 | 8,433 | — | — | 8,473 | ||||||||||||||||||
Issuance of shares under employee stock purchase plan | 8 | 2 | 517 | — | — | 519 | ||||||||||||||||||
Net income for the three months ended August 31, 2018 | — | — | — | — | 15,237 | 15,237 | ||||||||||||||||||
Other comprehensive loss for the three months ended August 31, 2018 | — | — | — | (2,778 | ) | — | (2,778 | ) | ||||||||||||||||
Balance at August 31, 2018 | 51,995 | $ | 8,320 | $ | 211,522 | $ | (12,524 | ) | $ | 374,308 | $ | 581,626 | ||||||||||||
Issuance of shares under share-based compensation plan | 87 | 14 | 4,093 | — | — | 4,107 | ||||||||||||||||||
Net income for the three months ended November 30, 2018 | — | — | — | — | 16,051 | 16,051 | ||||||||||||||||||
Other comprehensive income for the three months ended November 30, 2018 | — | — | — | 290 | — | 290 | ||||||||||||||||||
Balance at November 30, 2018 | 52,082 | $ | 8,334 | $ | 215,615 | $ | (12,234 | ) | $ | 390,359 | $ | 602,074 | ||||||||||||
Issuance of shares under share-based compensation plan | 78 | 12 | 4,146 | — | — | 4,158 | ||||||||||||||||||
Issuance of shares under employee stock purchase plan | 10 | 1 | 640 | — | — | 641 | ||||||||||||||||||
Shares repurchased | (50 | ) | (8 | ) | (3,127 | ) | — | — | (3,135 | ) | ||||||||||||||
Net income for the three months ended February 28, 2019 | — | — | — | — | 13,073 | 13,073 | ||||||||||||||||||
Other comprehensive loss for the three months ended February 28, 2019 | — | — | — | 3,105 | — | 3,105 | ||||||||||||||||||
Balance at February 28, 2019 | 52,120 | $ | 8,339 | $ | 217,274 | $ | (9,129 | ) | $ | 403,432 | $ | 619,916 | ||||||||||||
Six Months Ended | ||||||||||||||||
November 30, | Nine Months Ended February 29/28, | |||||||||||||||
2019 | 2018 | 2020 | 2019 | |||||||||||||
Cash Flows From Operating Activities | ||||||||||||||||
Net Income | $ | 30,928 | $ | 31,288 | $ | 43,128 | $ | 44,361 | ||||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||||||
Depreciation and amortization | 8,985 | 8,597 | 13,542 | 13,028 | ||||||||||||
Share-based compensation | 3,155 | 2,831 | 4,795 | 4,137 | ||||||||||||
Change in operating assets and liabilities, net of business acquisitions: | ||||||||||||||||
Accounts receivable | (2,483 | ) | (3,615 | ) | 3,841 | (898 | ) | |||||||||
Inventories | (103 | ) | (3,787 | ) | (2,238 | ) | (8,745 | ) | ||||||||
Prepaid expenses and other current assets | (1,323 | ) | (2,025 | ) | (3,119 | ) | (1,463 | ) | ||||||||
Accounts payable, accruals and other changes | 1,313 | (706 | ) | 301 | (7,455 | ) | ||||||||||
Net Cash From Operating Activities | 40,472 | 32,583 | 60,250 | 42,965 | ||||||||||||
Cash Flows For Investing Activities | ||||||||||||||||
Purchases of property, equipment and other assets | (12,806 | ) | (6,720 | ) | (16,322 | ) | (11,877 | ) | ||||||||
Proceeds from the sale of marketable securities | 199,708 | 179,839 | 300,448 | 290,827 | ||||||||||||
Purchases of marketable securities | (220,528 | ) | (191,488 | ) | (351,002 | ) | (316,195 | ) | ||||||||
Business acquisitions, net of cash acquired | — | (4,903 | ) | (9,701 | ) | (6,388 | ) | |||||||||
Net Cash For Investing Activities | (33,626 | ) | (23,272 | ) | (76,577 | ) | (43,633 | ) | ||||||||
Cash Flows From Financing Activities | ||||||||||||||||
Exercise of stock options and issuance of employee stock purchase plan shares | 19,213 | 10,268 | 27,915 | 13,752 | ||||||||||||
Repurchase of common stock | — | (3,135 | ) | |||||||||||||
Net Cash From Financing Activities | 19,213 | 10,268 | 27,915 | 10,617 | ||||||||||||
Effect of Exchange Rates on Cash | (1,333 | ) | (1,068 | ) | (2,502 | ) | 553 | |||||||||
Net Increase In Cash and Cash Equivalents | 24,726 | 18,511 | 9,086 | 10,502 | ||||||||||||
Cash and Cash Equivalents, Beginning of Period | 41,688 | 83,074 | 41,688 | 83,074 | ||||||||||||
Cash and Cash Equivalents, End of Period | $ | 66,414 | $ | 101,585 | $ | 50,774 | $ | 93,576 | ||||||||
2019 | ||||
February 29, 2020 | ||||
(in thousands) | ||||
Right of use - assets | $ | 1,755 | ||
Lease liabilities - current | 325 | |||
Lease liabilities - non-current | 1,467 |
February 29, 2020 | ||||
Weighted average remaining lease term | ||||
Weighted average discount rate |
Three Months Ended November 30, 2019 | Six Months Ended November 30, 2019 | Three Months Ended February 29, 2020 | Nine Months Ended February 29, 2020 | |||||||||||||
(in thousands) | (in thousands) | (in thousands) | (in thousands) | |||||||||||||
Operating leases | $ | 333 | $ | 573 | $ | 316 | $ | 889 | ||||||||
Short term leases | 34 | 81 | 25 | 106 | ||||||||||||
Total lease expense | $ | 367 | $ | 654 | $ | 341 | $ | 995 | ||||||||
Amount | ||||
(in thousands) | ||||
Years ending May 31, | ||||
2020 (1) | $ | 589 | ||
2021 | 917 | |||
2022 | 358 | |||
2023 | 169 | |||
2024 | 95 | |||
2025 and thereafter | 26 | |||
Total lease payments | 2,154 | |||
Less: imputed interest | 114 | |||
Total lease liabilities | $ | 2,040 | ||
Amount | ||||
(in thousands) | ||||
Years ending May 31, | ||||
2020 (1) | $ | 289 | ||
2021 | 915 | |||
2022 | 358 | |||
2023 | 168 | |||
2024 | 94 | |||
2025 and thereafter | 26 | |||
Total lease payments | 1,850 | |||
Less: imputed interest | 58 | |||
Total lease liabilities | $ | 1,792 | ||
(1) | Excluding the |
Future Minimum Lease Payments | ||||
(in thousands) | ||||
Years ending May 31, | ||||
2020 | $ | 1,112 | ||
2021 | 810 | |||
2022 | 297 | |||
2023 | 101 | |||
Thereafter | 0 | |||
$ | 2,320 | |||
Three Months ended November 30, | Six Months ended November 30, | Three Months ended February 2 9 /28 , | Nine Months ended February 2 9 /28 , | |||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Food Safety | ||||||||||||||||||||||||||||||||
Natural Toxins, Allergens & Drug Residues | $ | 20,681 | $ | 20,571 | $ | 40,796 | $ | 39,409 | $ | 17,154 | $ | 18,612 | $ | 57,950 | $ | 58,021 | ||||||||||||||||
Bacterial & General Sanitation | 11,615 | 10,822 | 21,931 | 21,288 | 9,413 | 9,519 | 31,345 | 30,807 | ||||||||||||||||||||||||
Culture Media & Other | 12,757 | 12,191 | 24,037 | 24,408 | 11,222 | 11,893 | 35,259 | 36,302 | ||||||||||||||||||||||||
Rodenticides, Insecticides & Disinfectants | 7,447 | 5,943 | 12,896 | 12,569 | 7,964 | 5,953 | 20,859 | 18,521 | ||||||||||||||||||||||||
Genomics Services | 4,354 | 4,223 | 8,216 | 8,259 | 4,745 | 5,136 | 12,961 | 13,395 | ||||||||||||||||||||||||
$ | 56,854 | $ | 53,750 | $ | 107,876 | $ | 105,933 | $ | 50,498 | $ | 51,113 | $ | 158,374 | $ | 157,046 | |||||||||||||||||
Animal Safety | ||||||||||||||||||||||||||||||||
Life Sciences | $ | 1,803 | $ | 1,891 | $ | 3,525 | $ | 3,971 | $ | 1,376 | $ | 1,823 | $ | 4,901 | $ | 5,794 | ||||||||||||||||
Veterinary Instruments & Disposables | 10,486 | 11,683 | 21,822 | 22,087 | 10,799 | 10,682 | 32,621 | 32,769 | ||||||||||||||||||||||||
Animal Care & Other | 7,787 | 8,948 | 14,193 | 15,346 | 6,667 | 6,554 | 20,859 | 21,900 | ||||||||||||||||||||||||
Rodenticides, Insecticides & Disinfectants | 16,186 | 18,789 | 32,904 | 35,935 | 14,558 | 13,525 | 47,462 | 49,460 | ||||||||||||||||||||||||
Genomics Services | 14,687 | 12,037 | 28,907 | 23,452 | 15,971 | 14,003 | 44,879 | 37,455 | ||||||||||||||||||||||||
$ | 50,949 | $ | 53,348 | $ | 101,351 | $ | 100,791 | $ | 49,371 | $ | 46,587 | $ | 150,722 | $ | 147,378 | |||||||||||||||||
Total Revenues | $ | 107,803 | $ | 107,098 | $ | 209,227 | $ | 206,724 | $ | 99,869 | $ | 97,700 | $ | 309,096 | $ | 304,424 | ||||||||||||||||
November 30, | May 31, | February 29, | May 31, | |||||||||||||
2019 | 2019 | 2020 | 2019 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Raw materials | $ | 43,316 | $ | 41,594 | $ | 42,243 | $ | 41,594 | ||||||||
Work-in-process | 6,077 | 5,581 | 5,402 | 5,581 | ||||||||||||
Finished and purchased goods | 37,013 | 38,817 | 41,599 | 38,817 | ||||||||||||
$ | 86,406 | $ | 85,992 | $ | 89,244 | $ | 85,992 | |||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
November 30, | November 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Numerator for basic and diluted net income per share: | ||||||||||||||||
Net income attributable to Neogen | $ | 16,276 | $ | 16,051 | $ | 30,928 | $ | 31,288 | ||||||||
Denominator for basic net income per share: | ||||||||||||||||
Weighted average shares | 52,557 | 52,019 | 52,355 | 51,820 | ||||||||||||
Effect of dilutive stock options | 319 | 572 | 357 | 721 | ||||||||||||
Denominator for diluted net income per share | 52,876 | 52,591 | 52,712 | 52,541 | ||||||||||||
Net income attributable to Neogen per share: | ||||||||||||||||
Basic | $ | 0.31 | $ | 0.31 | $ | 0.59 | $ | 0.60 | ||||||||
Diluted | $ | 0.31 | $ | 0.31 | $ | 0.59 | $ | 0.60 | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
February 29/28, | February 29/28, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Numerator for basic and diluted net income per share: | ||||||||||||||||
Net income attributable to Neogen | $ | 12,200 | $ | 13,073 | $ | 43,128 | $ | 44,361 | ||||||||
Denominator for basic net income per share: | ||||||||||||||||
Weighted average shares | 52,795 | 52,071 | 52,463 | 51,849 | ||||||||||||
Effect of dilutive stock options | 253 | 401 | 320 | 599 | ||||||||||||
Denominator for diluted net income per share | 53,048 | 52,472 | 52,783 | 52,448 | ||||||||||||
Net income attributable to Neogen per share: | ||||||||||||||||
Basic | $ | 0.23 | $ | 0.25 | $ | 0.82 | $ | 0.86 | ||||||||
Diluted | $ | 0.23 | $ | 0.25 | $ | 0.82 | $ | 0.85 | ||||||||
Corporate and | ||||||||||||||||
Food | Animal | Eliminations | ||||||||||||||
Safety | Safety | (1) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
As of and for the three months ended November 30, 2019 | ||||||||||||||||
Product revenues to external customers | $ | 51,188 | $ | 36,199 | $ | — | $ | 87,387 | ||||||||
Service revenues to external customers | 5,666 | 14,750 | — | 20,416 | ||||||||||||
Total revenues to external customers | 56,854 | 50,949 | — | 107,803 | ||||||||||||
Operating income (loss) | 9,556 | 9,729 | (1,013 | ) | 18,272 | |||||||||||
Total assets | 212,928 | 224,058 | 313,605 | 750,591 | ||||||||||||
As of and for the three months ended November 30, 2018 | ||||||||||||||||
Product revenues to external customers | $ | 48,256 | $ | 41,306 | $ | — | $ | 89,562 | ||||||||
Service revenues to external customers | 5,494 | 12,042 | — | 17,536 | ||||||||||||
Total revenues to external customers | 53,750 | 53,348 | — | 107,098 | ||||||||||||
Operating income (loss) | 10,342 | 9,057 | (1,153 | ) | 18,246 | |||||||||||
Total assets | 201,291 | 218,231 | 240,970 | 660,492 |
Food Safety | Animal Safety | Corporate and Eliminations (1) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
As of and for the three months ended February 29, 2020 | ||||||||||||||||
Product revenues to external customers | $ | 44,450 | $ | 33,286 | $ | — | $ | 77,736 | ||||||||
Service revenues to external customers | 6,048 | 16,085 | — | 22,133 | ||||||||||||
Total revenues to external customers | 50,498 | 49,371 | — | 99,869 | ||||||||||||
Operating income (loss) | 5,881 | 8,492 | (1,330 | ) | 13,043 | |||||||||||
Total assets | 226,077 | 219,501 | 327,923 | 773,501 | ||||||||||||
As of and for the three months ended February 28, 2019 | ||||||||||||||||
Product revenues to external customers | $ | 44,790 | $ | 32,585 | $ | — | $ | 77,375 | ||||||||
Service revenues to external customers | 6,323 | 14,002 | — | 20,325 | ||||||||||||
Total revenues to external customers | 51,113 | 46,587 | — | 97,700 | ||||||||||||
Operating income (loss) | 8,339 | 7,338 | (1,038 | ) | 14,639 | |||||||||||
Total assets | 204,570 | 221,335 | 246,680 | 672,585 |
(1) | Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities , current and deferred tax accounts and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. |
Corporate and | ||||||||||||||||
Food | Animal | Eliminations | ||||||||||||||
Safety | Safety | (1) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
As of and for the six months ended November 30, 2019 | ||||||||||||||||
Product revenues to external customers | $ | 97,065 | $ | 72,270 | $ | — | $ | 169,335 | ||||||||
Service revenues to external customers | 10,810 | 29,082 | — | 39,892 | ||||||||||||
Total revenues to external customers | 107,875 | 101,352 | — | 209,227 | ||||||||||||
Operating income (loss) | 18,690 | 18,029 | (2,183 | ) | 34,536 | |||||||||||
As of and for the six months ended November 30, 2018 | ||||||||||||||||
Product revenues to external customers | $ | 95,189 | $ | 77,333 | $ | — | $ | 172,522 | ||||||||
Service revenues to external customers | 10,744 | 23,458 | — | 34,202 | ||||||||||||
Total revenues to external customers | 105,933 | 100,791 | — | 206,724 | ||||||||||||
Operating income (loss) | 21,215 | 15,763 | (2,253 | ) | 34,725 |
Food Safety | Animal Safety | Corporate and Eliminations (1) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
As of and for the nine months ended February 29, 2020 | ||||||||||||||||
Product revenues to external customers | $ | 141,516 | $ | 105,555 | $ | — | $ | 247,071 | ||||||||
Service revenues to external customers | 16,858 | 45,167 | — | 62,025 | ||||||||||||
Total revenues to external customers | 158,374 | 150,722 | — | 309,096 | ||||||||||||
Operating income (loss) | 24,571 | 26,521 | (3,513 | ) | 47,579 | |||||||||||
As of and for the nine months ended February 28, 2019 | ||||||||||||||||
Product revenues to external customers | $ | 139,979 | $ | 109,918 | $ | — | $ | 249,897 | ||||||||
Service revenues to external customers | 17,067 | 37,460 | — | 54,527 | ||||||||||||
Total revenues to external customers | 157,046 | 147,378 | — | 304,424 | ||||||||||||
Operating income (loss) | 29,554 | 23,101 | (3,291 | ) | 49,364 |
(1) | Includes elimination of intersegment |
Three months ended | Six months ended | Three months ended | Nine months ended | |||||||||||||||||||||||||||||
November 30, | November 30, | February 29/28, | February 29/28, | |||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
(in thousands) | (in thousands) | (in thousands) | (in thousands) | |||||||||||||||||||||||||||||
Revenues by Geographic Location | ||||||||||||||||||||||||||||||||
Domestic | $ | 63,317 | $ | 65,033 | $ | 126,657 | $ | 124,879 | $ | 59,762 | $ | 57,422 | $ | 186,887 | $ | 182,298 | ||||||||||||||||
International | 44,486 | 42,065 | 82,570 | 81,845 | 40,107 | 40,278 | 122,209 | 122,126 | ||||||||||||||||||||||||
Total revenue | 107,803 | 107,098 | 209,227 | 206,724 | 99,869 | 97,700 | 309,096 | 304,424 | ||||||||||||||||||||||||
Weighted- | ||||||||||||||||
Average | ||||||||||||||||
(Options in thousands) | Shares | Weighted- Average Exercise Price | Shares | Exercise Price | ||||||||||||
Options outstanding June 1, 2019 | 2,385 | $ | 49.37 | 2,385 | $ | 49.37 | ||||||||||
Granted | 561 | 63.91 | 561 | 63.91 | ||||||||||||
Exercised | (493 | ) | 39.01 | (686 | ) | 40.07 | ||||||||||
Forfeited | (51 | ) | 56.26 | (56 | ) | 56.67 | ||||||||||
Options outstanding November 30, 2019 | 2,402 | $ | 54.76 | |||||||||||||
Options outstanding February 29, 2020 | 2,204 | $ | 55.77 |
FY | ||||
Risk-free interest rate | 1.9% | |||
Expected dividend yield | 0.0% | |||
Expected stock price volatility | 29.4% | |||
Expected option life | 3.5 years |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended | Six Months Ended | |||||||||||||||
November 30, 2019 | November 30, 2019 | |||||||||||||||
Revenue | Revenue | Revenue | Revenue | |||||||||||||
% Increase/(Decrease) | % Increase/(Decrease) | % Increase | % Increase | |||||||||||||
USD | Local Currency | USD | Local Currency | |||||||||||||
Neogen Europe (including Lab M & Quat-Chem) | 7 | % | 10 | % | 1 | % | 5 | % | ||||||||
Neogen do Brasil (including Deoxi & Rogama) | 20 | % | 27 | % | 0 | % | 4 | % | ||||||||
Neogen Latinoamerica | 5 | % | 5 | % | 5 | % | 5 | % | ||||||||
Neogen China | 40 | % | 43 | % | 10 | % | 14 | % | ||||||||
Neogen India | (1 | )% | (3 | )% | 8 | % | 7 | % | ||||||||
Neogen Canada | 329 | % | 334 | % | 181 | % | 184 | % | ||||||||
Neogen Australasia | 18 | % | 25 | % | 20 | % | 27 | % |
Three Months Ended February 29, 2020 | Nine Months Ended February 29, 2020 | |||||||||||||||
Revenue | Revenue | Revenue | Revenue | |||||||||||||
% Increase/(Decrease) USD | % Increase/(Decrease) Local Currency | % Increase USD | % Increase Local Currency | |||||||||||||
UK Companies | 5 | % | 4 | % | 3 | % | 5 | % | ||||||||
Brazilian Companies | (16 | )% | (6 | )% | (5 | )% | 1 | % | ||||||||
Neogen Latinoamerica | 15 | % | 11 | % | 8 | % | 7 | % | ||||||||
Neogen China | 37 | % | 41 | % | 20 | % | 24 | % | ||||||||
Neogen India | 18 | % | 19 | % | 11 | % | 11 | % | ||||||||
Neogen Canada | 75 | % | 73 | % | 135 | % | 135 | % | ||||||||
Neogen Australasia | 7 | % | 12 | % | 15 | % | 22 | % |
Three Months Ended November 30, | ||||||||||||||||||||||||||||||||
Increase/ | Three Months Ended February 29/28, | |||||||||||||||||||||||||||||||
2019 | 2018 | (Decrease) | % | 2020 | 2019 | Increase/ (Decrease) | % | |||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Food Safety | ||||||||||||||||||||||||||||||||
Natural Toxins, Allergens & Drug Residues | $ | 20,681 | $ | 20,571 | $ | 110 | 1 | % | $ | 17,154 | $ | 18,612 | $ | (1,458 | ) | (8 | )% | |||||||||||||||
Bacterial & General Sanitation | 11,615 | 10,822 | 793 | 7 | % | 9,413 | 9,519 | (106 | ) | (1 | )% | |||||||||||||||||||||
Culture Media & Other | 12,757 | 12,191 | 566 | 5 | % | 11,222 | 11,893 | (671 | ) | (6 | )% | |||||||||||||||||||||
Rodenticides, Insecticides & Disinfectants | 7,447 | 5,943 | 1,504 | 25 | % | 7,964 | 5,953 | 2,011 | 34 | % | ||||||||||||||||||||||
Genomics Services | 4,354 | 4,223 | 131 | 3 | % | 4,745 | 5,136 | (391 | ) | (8 | )% | |||||||||||||||||||||
$ | 50,498 | $ | 51,113 | $ | (615 | ) | (1 | )% | ||||||||||||||||||||||||
$ | 56,854 | $ | 53,750 | $ | 3,104 | 6 | % | |||||||||||||||||||||||||
Animal Safety | ||||||||||||||||||||||||||||||||
Life Sciences | $ | 1,803 | $ | 1,891 | $ | (88 | ) | (5 | )% | $ | 1,376 | $ | 1,823 | $ | (447 | ) | (25 | )% | ||||||||||||||
Veterinary Instruments & Disposables | 10,486 | 11,683 | (1,197 | ) | (10 | )% | 10,799 | 10,682 | 117 | 1 | % | |||||||||||||||||||||
Animal Care & Other | 7,787 | 8,948 | (1,161 | ) | (13 | )% | 6,667 | 6,554 | 113 | 2 | % | |||||||||||||||||||||
Rodenticides, Insecticides & Disinfectants | 16,186 | 18,789 | (2,603 | ) | (14 | )% | 14,558 | 13,525 | 1,033 | 8 | % | |||||||||||||||||||||
Genomics Services | 14,687 | 12,037 | 2,650 | 22 | % | 15,971 | 14,003 | 1,968 | 14 | % | ||||||||||||||||||||||
$ | 50,949 | $ | 53,348 | $ | (2,399 | ) | (4 | )% | $ | 49,371 | $ | 46,587 | $ | 2,784 | 6 | % | ||||||||||||||||
Total Revenues | $ | 107,803 | $ | 107,098 | $ | 705 | 1 | % | $ | 99,869 | $ | 97,700 | $ | 2,169 | 2 | % | ||||||||||||||||
Six Months Ended November 30, | ||||||||||||||||||||||||||||||||
Increase/ | ||||||||||||||||||||||||||||||||
2019 | 2018 | (Decrease) | % | |||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Food Safety | ||||||||||||||||||||||||||||||||
Natural Toxins, Allergens & Drug Residues | $ | 40,796 | $ | 39,409 | $ | 1,387 | 4 | % | ||||||||||||||||||||||||
Bacterial & General Sanitation | 21,931 | 21,288 | 643 | 3 | % | |||||||||||||||||||||||||||
Culture Media & Other | 24,037 | 24,408 | (371 | ) | (2 | )% | ||||||||||||||||||||||||||
Rodenticides, Insecticides & Disinfectants | 12,896 | 12,569 | 327 | 3 | % | |||||||||||||||||||||||||||
Genomics Services | 8,216 | 8,259 | (43 | ) | (1 | )% | ||||||||||||||||||||||||||
$ | 107,876 | $ | 105,933 | $ | 1,943 | 2 | % | |||||||||||||||||||||||||
Animal Safety | ||||||||||||||||||||||||||||||||
Life Sciences | $ | 3,525 | $ | 3,971 | $ | (446 | ) | (11 | )% | |||||||||||||||||||||||
Veterinary Instruments & Disposables | 21,822 | 22,087 | (265 | ) | (1 | )% | ||||||||||||||||||||||||||
Animal Care & Other | 14,193 | 15,346 | (1,153 | ) | (8 | )% | ||||||||||||||||||||||||||
Rodenticides, Insecticides & Disinfectants | 32,904 | 35,935 | (3,031 | ) | (8 | )% | ||||||||||||||||||||||||||
Genomics Services | 28,907 | 23,452 | 5,455 | 23 | % | |||||||||||||||||||||||||||
$ | 101,351 | $ | 100,791 | $ | 560 | 1 | % | |||||||||||||||||||||||||
Total Revenues | $ | 209,227 | $ | 206,724 | $ | 2,503 | 1 | % | ||||||||||||||||||||||||
Nine Months Ended February 29/28, | ||||||||||||||||
2020 | 2019 | Increase/ (Decrease) | % | |||||||||||||
(in thousands) | ||||||||||||||||
Food Safety | ||||||||||||||||
Natural Toxins, Allergens & Drug Residues | $ | 57,950 | $ | 58,021 | $ | (71 | ) | 0 | % | |||||||
Bacterial & General Sanitation | 31,345 | 30,807 | 538 | 2 | % | |||||||||||
Culture Media & Other | 35,259 | 36,302 | (1,043 | ) | (3 | )% | ||||||||||
Rodenticides, Insecticides & Disinfectants | 20,859 | 18,521 | 2,338 | 13 | % | |||||||||||
Genomics Services | 12,961 | 13,395 | (434 | ) | (3 | )% | ||||||||||
$ | 158,374 | $ | 157,046 | $ | 1,328 | 1 | % | |||||||||
Animal Safety | ||||||||||||||||
Life Sciences | $ | 4,901 | $ | 5,794 | $ | (893 | ) | (15 | )% | |||||||
Veterinary Instruments & Disposables | 32,621 | 32,769 | (148 | ) | 0 | % | ||||||||||
Animal Care & Other | 20,859 | 21,900 | (1,041 | ) | (5 | )% | ||||||||||
Rodenticides, Insecticides & Disinfectants | 47,462 | 49,460 | (1,998 | ) | (4 | )% | ||||||||||
Genomics Services | 44,879 | 37,455 | 7,424 | 20 | % | |||||||||||
$ | 150,722 | $ | 147,378 | $ | 3,344 | 2 | % | |||||||||
Total Revenues | $ | 309,096 | $ | 304,424 | $ | 4,672 | 2 | % | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
November 30, | November 30, | |||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest income (net of expense) | $ | 1,271 | $ | 1,028 | $ | 2,781 | $ | 1,955 | ||||||||
Foreign currency transactions | (352 | ) | (72 | ) | (469 | ) | (458 | ) | ||||||||
Royalty income | — | 37 | 1 | 59 | ||||||||||||
Deoxi contingent consideration | — | — | — | (9 | ) | |||||||||||
Quat-Chem contingent consideration | — | 422 | — | 422 | ||||||||||||
Other | 35 | 40 | 29 | 144 | ||||||||||||
Total Other Income | $ | 954 | $ | 1,455 | $ | 2,342 | $ | 2,113 | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
February 29/28 | February 29/28 | |||||||||||||||
(dollars in thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Interest income (net of expense) | $ | 1,600 | $ | 1,335 | $ | 4,381 | $ | 3,290 | ||||||||
Foreign currency transactions | (420 | ) | 104 | (889 | ) | (354 | ) | |||||||||
Royalty income | — | — | 1 | 60 | ||||||||||||
Deoxi contingent consideration | — | — | — | (9 | ) | |||||||||||
Quat-Chem contingent consideration | — | — | — | 422 | ||||||||||||
Other | 28 | 545 | 56 | 688 | ||||||||||||
Total Other Income | $ | 1,208 | $ | 1,984 | $ | 3,549 | $ | 4,097 | ||||||||
Item 3. |
Item 4. | Controls and Procedures |
Evaluation |
Item 1. |
Item 1A. | Risk Factors |
Item 6. | Exhibits |
3 | ||||
10 | ||||
31.1 | ||||
31.2 | ||||
32 | ||||
101.INS | Inline XBRL | |||
101.SCH | Inline XBRL Taxonomy Extension | |||
101.CAL | Inline XBRL Taxonomy Extension | |||
101.DEF | Inline XBRL Taxonomy Extension | |||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||
EX-104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
NEOGEN CORPORATION | ||||||
(Registrant) | ||||||
Dated: | ||||||
/s/ John E. Adent | ||||||
John E. Adent | ||||||
President & Chief Executive Officer | ||||||
(Principal Executive Officer) | ||||||
Dated: | ||||||
/s/ Steven J. Quinlan | ||||||
Steven J. Quinlan | ||||||
Vice President & Chief Financial Officer | ||||||
(Principal Financial Officer and Principal Accounting Officer) |